Form 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-1743
The Rouse Company
(Exact name of registrant as specified in its charter)
Maryland 52-0735512
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
10275 Little Patuxent Parkway
Columbia, Maryland 21044-3456
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (410) 992-6000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of the issuer's common stock as
of May 9, 1997:
Common Stock, $0.01 par value 66,795,842
Title of Class Number of Shares
Part I. Financial Information
Item 1. Financial Statements:
THE ROUSE COMPANY AND SUBSIDIARIES
Consolidated Statements of Operations
Three Months Ended March 31, 1997 and 1996
(Unaudited, in thousands except per share amounts, note 1)
Three months
ended March 31,
1997 1996
Revenues:
Operating properties:
Retail centers $119,563 $118,790
Office, mixed-use and other 52,795 35,868
172,358 154,658
Land sales 37,594 17,661
Corporate interest income 1,089 829
211,041 173,148
Operating expenses, exclusive of
provision for bad debts, depreciation
and amortization:
Operating properties:
Retail centers 59,840 60,882
Office, mixed-use and other 26,617 17,267
86,457 78,149
Land sales 27,876 9,444
Development 1,123 1,215
Corporate 3,293 2,026
118,749 90,834
Interest expense:
Operating properties:
Retail centers 31,658 31,232
Office, mixed-use and other 20,572 17,071
52,230 48,303
Land sales 931 250
Development -- 75
Corporate 1,161 3,623
54,322 52,251
Provision for bad debts 897 621
Depreciation and amortization 20,785 18,284
194,753 161,990
The accompanying notes are an integral part of these statements.
1
Part I. Financial Information, continued
Item 1. Financial Statements, continued:
THE ROUSE COMPANY AND SUBSIDIARIES
Consolidated Statements of Operations, continued
Three Months Ended March 31, 1997 and 1996
(Unaudited, in thousands except per share amounts, note 1)
Three months
ended March 31,
1997 1996
Earnings before income taxes and
extraordinary losses $ 16,288 $ 11,158
Income taxes
Current - primarily state 155 179
Deferred 7,723 4,236
7,878 4,415
Earnings before extraordinary losses 8,410 6,743
Extraordinary losses from early extinguishments
of debt, net of related income tax benefits
(note 5) (2,129) (1,315)
Net earnings $ 6,281 $ 5,428
Net earnings applicable
to common shareholders $ 5,081 $ 1,768
EARNINGS PER SHARE OF COMMON STOCK AFTER
DIVIDENDS ON PREFERRED STOCK:
Earnings before extraordinary losses $ .11 $ .06
Extraordinary losses (.03) (.02)
$ .08 $ .04
DIVIDENDS PER SHARE:
Common stock $ .25 $ .22
Preferred stock $ .30 $ .81
The accompanying notes are an integral part of these statements.
2
Part I. Financial Information, continued
Item 1. Financial Statements, continued:
THE ROUSE COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
March 31, 1997 and December 31, 1996
(Unaudited, in thousands, note 1)
March 31, December 31,
1997 1996
Assets:
Property (note 2):
Operating properties:
Property and deferred costs
of projects $3,416,465 $3,374,976
Less accumulated depreciation
and amortization 571,153 552,201
2,845,312 2,822,775
Properties in development 209,303 176,060
Properties held for sale 72,839 73,080
Investment land and land held for
development and sale 245,009 244,117
Total property 3,372,463 3,316,032
Prepaid expenses, deferred charges
and other assets 178,952 187,689
Accounts and notes receivable 82,118 92,369
Investments in marketable securities 3,895 3,596
Cash and cash equivalents 118,978 43,766
Total $3,756,406 $3,643,452
The accompanying notes are an integral part of these statements.
3
Part I. Financial Information, continued
Item 1. Financial Statements, continued:
THE ROUSE COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets, continued
March 31, 1997 and December 31, 1996
(Unaudited, in thousands, note 1)
March 31, December 31,
1997 1996
Liabilities:
Debt (note 3):
Property debt not carrying a Parent
Company guarantee of repayment $2,259,507 $2,290,406
Parent Company debt and debt carrying a
Parent Company guarantee of repayment:
Property debt 151,443 179,540
Convertible subordinated debentures 130,000 130,000
Other debt 230,300 235,300
511,743 544,840
Total debt 2,771,250 2,835,246
Obligations under capital leases 59,616 60,201
Accounts payable, accrued expenses
and other liabilities 281,619 298,562
Deferred income taxes 141,371 134,794
Company-obligated mandatorily redeemable
preferred securities of a trust holding
solely Parent Company subordinated debt
securities 137,500 137,500
Shareholders' equity:
Series B Convertible Preferred stock
with a liquidation preference of $202,500
in 1997 (note 4) 41 --
Common stock of 1 cent par value per share;
250,000,000 shares authorized; 66,795,842
shares issued in 1997 and 66,742,871
shares issued in 1996 668 667
Additional paid-in capital 688,329 488,849
Accumulated deficit (323,988) (312,367)
Total shareholders' equity 365,050 177,149
Total $3,756,406 $3,643,452
The accompanying notes are an integral part of these statements.
4
Part I. Financial Information, continued
Item 1. Financial Statements, continued:
THE ROUSE COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1997 and 1996
(Unaudited, in thousands, note 1)
1997 1996
Cash flows from operating activities:
Rents and other revenues received $ 177,098 $ 157,970
Proceeds from land sales 33,612 17,509
Interest received 3,205 2,996
Land development expenditures (21,096) (2,424)
Operating expenditures:
Operating properties (92,811) (78,138)
Land sales, development and corporate (11,533) (6,692)
Interest paid:
Operating properties (54,374) (50,887)
Land sales, development and corporate (1,273) (4,036)
Net cash provided by operating activities 32,828 36,298
Cash flows from investing activities:
Expenditures for properties in development
and improvements to existing properties
funded by debt (57,650) (19,188)
Expenditures for improvements to
existing properties funded by cash
provided by operating activities:
Tenant leasing and remerchandising (1,045) (2,842)
Building and equipment (2,350) (1,190)
Proceeds from sales of operating properties -- 4,728
Purchases of marketable securities (2,866) (1,459)
Proceeds from redemptions or sales of
marketable securities 2,567 1,269
Other 3,004 (10,283)
Net cash used in investing activities (58,340) (28,965)
Cash flows from financing activities:
Proceeds from issuance of property debt 114,787 71,560
Repayments of property debt:
Scheduled principal payments (11,303) (8,476)
Other payments (146,318) (110,264)
Proceeds from issuance of other debt 15,000 --
Repayments of other debt (35,502) (5,522)
Proceeds from issuance of Preferred stock 197,145 --
Purchases of treasury stock (16,286) --
Proceeds from exercise of stock options 1,351 --
Dividends paid (17,900) (14,275)
Other (250) (499)
Net cash provided by (used in) financing
activities 100,724 (67,476)
Net increase (decrease) in cash and cash equivalents 75,212 (60,143)
Cash and cash equivalents at beginning of period 43,766 94,922
Cash and cash equivalents at end of period $ 118,978 $ 34,779
The accompanying notes are an integral part of these statements.
5
Part I. Financial Information, continued
Item 1. Financial Statements, continued:
THE ROUSE COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows, continued
Three Months Ended March 31, 1997 and 1996
(Unaudited, in thousands, note 1)
1997 1996
Reconciliation of net earnings to net cash
provided by operating activities:
Net earnings $ 6,281 $ 5,428
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 20,785 18,284
Deferred income taxes 7,723 4,236
Extraordinary losses, net of related income
tax benefits 2,129 1,315
Additions to preconstruction reserve 500 1,000
Provision for bad debts 897 621
Decrease (increase) in operating assets and
liabilities, net (5,487) 5,414
Net cash provided by operating activities $32,828 $36,298
Schedule of Noncash Investing and Financing
Activities:
Common stock issued pursuant to Contingent Stock
Agreement $17,313 $ --
Debt assumed by purchasers of land 3,995 --
Note received from sale of an operating property -- 1,440
The accompanying notes are an integral part of these statements.
6
Part I. Financial Information, continued
Item 1. Financial Statements, continued:
THE ROUSE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
March 31, 1997
(1) Principles of statement presentation
The unaudited consolidated financial statements include all
adjustments which are necessary, in the opinion of management, to
fairly reflect the Company's financial position and results of
operations. All such adjustments are of a normal recurring nature.
The statements have been prepared using the accounting policies
described in the 1996 Annual Report to Shareholders.
In its annual reports, the Company has included certain supplementary
current value basis financial statements with the historical cost
basis financial statements. The current value basis financial
statements are not presented as part of the Company's quarterly
reports to shareholders. Therefore, all of the financial information
contained herein is based on the historical cost basis as required by
generally accepted accounting principles.
(2) Property
Properties in development include construction and development in
progress and preconstruction costs, net. The construction and
development in progress accounts include land and land improvements
of $51,669,000 at March 31, 1997.
Changes in preconstruction costs, net, for the three months ended
March 31, 1997 are summarized as follows (in thousands):
Balance at beginning of period, before
preconstruction reserve $ 22,158
Costs incurred 6,823
Costs transferred to construction and development
in progress (1,734)
Costs transferred to operating properties (3,889)
Costs of unsuccessful projects written off (42)
23,316
Less preconstruction reserve 16,775
Balance at end of period, net $ 6,541
7
Part I. Financial Information, continued
Item 1. Financial Statements, continued:
THE ROUSE COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited), continued
(3) Debt
Debt at March 31, 1997 and December 31, 1996 is summarized as
follows (in thousands):
March 31, 1997 December 31, 1996
Due in Due in
Total one year Total one year
Mortgages and bonds $2,298,075 $ 61,336 $2,279,971 $114,831
Convertible subordi-
nated debentures 130,000 - 130,000 -
Medium-term notes 110,300 10,000 115,300 5,000
Credit line borrowings - - 64,000 -
Other loans 232,875 4,247 245,975 4,694
Total $2,771,250 $ 75,583 $2,835,246 $124,525
The amounts due in one year reflect the terms of existing loan
agreements except where refinancing commitments from outside lenders
have been obtained. In these instances, maturities are determined
based on the terms of the refinancing commitments.
(4) Series B Convertible Preferred stock
The Company has registered to sell up to an aggregate of
$500,000,000 (based on the public offering price) of common stock,
Preferred stock and debt securities. The stock and debt may be
issued from time to time at prices, in amounts and on terms to be
determined at the time of offering. In the first quarter of 1997,
the Company issued 4,050,000 shares of the Series B Convertible
Preferred stock pursuant to this registration.
(5) Extraordinary losses, net of related income tax benefits
During the three months ended March 31, 1997 and 1996, the Company
incurred extraordinary losses related to extinguishments of debt
prior to scheduled maturity of $3,275,000 and $2,023,000,
respectively, net of related income tax benefits of $1,146,000 and
$708,000, respectively.
(6) Contingencies
The Company and certain of its subsidiaries are defendants in various
litigation matters arising in the ordinary course of business, some
of which involve claims for damages that are substantial in amount.
Some of these litigation matters are covered by insurance. In the
opinion of management, adequate provision has been made for losses
with respect to all litigation matters, where appropriate, and the
ultimate resolution of all such litigation matters is not likely to
have a material effect on the consolidated financial position of the
Company. Due to the Company's modest and fluctuating net earnings,
it is not possible to predict whether the resolution of these matters
is likely to have a material effect on the Company's consolidated net
earnings, and it is, therefore, possible that resolution of these
matters could have a material effect in any future quarter or year.
8
Part I. Financial Information, continued
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations:
THE ROUSE COMPANY AND SUBSIDIARIES
The following discussion and analysis covers any material changes in
financial condition since December 31, 1996 and any material changes
in the results of operations for the three months ended March 31, 1997
as compared to the same period in 1996. This discussion and analysis
should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included in
the 1996 Annual Report to Shareholders.
General
On June 12, 1996, the Company purchased all of the outstanding equity
interests in The Hughes Corporation and its affiliated partnership,
Howard Hughes Properties, Limited Partnership (together, Hughes). The
assets of Hughes consist primarily of a regional shopping center and a
large-scale, master-planned community (Summerlin) in Las Vegas,
Nevada, and four large-scale, master-planned business parks and
various other properties in Nevada and Southern California.
Management is continually reviewing and evaluating the portfolio of
properties to identify expansion, renovation and/or remerchandising
opportunities and properties that may not have future prospects
consistent with the Company's long term objectives. The Company will
continue to dispose of properties that are not meeting and/or are not
considered to have the potential to meet its long term objectives,
particularly smaller properties in smaller market areas. While
disposition decisions may cause the Company to recognize gains or
losses that could have material effects on reported net earnings
(loss) in future quarters or fiscal years, they are not anticipated to
have a material effect on the overall consolidated financial position
of the Company.
Operating Results:
Operating Properties:
Revenues from retail centers increased $773,000 for the three months ended
March 31, 1997, while total operating and interest expenses increased
$329,000, as compared to the same period in 1996. The increases in
revenues and expenses for the period were attributable primarily to
changes in the Company's portfolio of retail centers, including
acquisitions of interests in two properties, (one in connection with
the acquisition of Hughes in the second quarter of 1996 and one in the
third quarter of 1996) and higher rents on re-leased space. These
increases were largely offset by the effects of lower average
occupancy, dispositions of interests in properties (two in the first
quarter of 1996 and one in the fourth quarter of 1996), lower tenant
lease termination payments and an increase in bad debts.
9
Part I. Financial Information, continued
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations, (continued):
Operating Properties (continued):
Revenues from office, mixed-use and other properties increased $16,927,000
and total operating and interest expenses increased $14,433,000 for
the three months ended March 31, 1997, as compared to the same period
in 1996. The increases in revenues and expenses were attributable
primarily to the acquisition of Hughes and higher occupancy levels in
hotel properties. The increase in expenses was partially offset by
lower bad debts due to the recovery of a note receivable
(approximately $800,000) previously reserved and the sale of an
unoccupied industrial building in the second quarter of 1996.
Land sales:
Revenue from land sales increased $19,933,000 and related costs and
expenses increased $19,113,000 for the three months ended March 31,
1997, as compared to the same period in 1996. The increases in
revenues and costs and expenses are attributable primarily to the
acquisition of Hughes. Revenues from sales of land acquired in the
purchase of Hughes were $28,269,000 and related costs and expenses
were $22,995,000. These increases were partially offset by decreases
in revenues and costs and expenses related to land sales in Columbia
of $8,336,000 and $3,882,000, respectively, due to lower levels of
sales for both residential and commercial uses.
Development:
Development expenses consist primarily of additions to the preconstruction
reserve and new business costs. The preconstruction reserve is
maintained to provide for costs of projects which may not go forward
to completion. New business costs relate primarily to the initial
evaluation of potential acquisition and development opportunities.
These costs decreased $167,000 for the three months ended March 31,
1997 as compared to the same period in 1996. The decrease was
attributable primarily to a decrease in additions to the
preconstruction reserve due to the progress achieved on several
significant projects.
10
Part I. Financial Information, continued
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations (continued):
Corporate:
Corporate interest costs were $4,068,000 and $4,555,000 for the three
months ended March 31, 1997 and 1996, respectively. Of such amounts,
$2,907,000 and $932,000 were capitalized during the three months ended
March 31, 1997 and 1996, respectively, on funds invested in
development projects. The decrease in corporate interest expense is
due primarily to lower levels of borrowings. The increase in the
amount capitalized is attributable to higher levels of corporate funds
invested in projects under development.
Extraordinary losses, net of related income tax benefits
During the three months ended March 31, 1997 and 1996, the Company
incurred extraordinary losses related to extinguishments of debt prior
to scheduled maturity of $3,275,000 and $2,023,000, respectively, net
of related income tax benefits of $1,146,000 and $708,000,
respectively.
Financial Condition and Liquidity:
Shareholders' equity increased by $187,901,000 from $177,149,000 at
December 31, 1996 to $365,050,000 at March 31, 1997. The increase was
primarily attributable to the issuance of the Series B Convertible
Preferred Stock as discussed in note 4 to the consolidated financial
statements and the net earnings for the three months ended March 31,
1997. These increases were partially offset by the payment of regular
quarterly dividends on the Company's common and Preferred stocks.
The Company had cash and cash equivalents and investments in marketable
securities totaling $122,873,000 and $47,362,000 at March 31, 1997 and
December 31, 1996, respectively, including $3,895,000 and $3,596,000
of investments, respectively, held for restricted uses.
The Company and certain of its subsidiaries have available lines of credit
from banks and other lenders aggregating $248,120,000, including
outstanding borrowings at March 31, 1997. These credit lines may be
used for various purposes, including land and project development
costs, property acquisitions, liquidity and other corporate needs,
subject to specific use limitations and/or lender approvals in certain
cases. They may also be utilized to pay some portion of existing
debt, including maturities in 1997 and 1998. As of March 31, 1997,
debt due in one year was $75,583,000. The Company is continually
evaluating sources of capital, and management believes there are
satisfactory sources available for all requirements without
necessitating property sales.
11
Part I. Financial Information, continued
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations, (continued)
Financial Information and Liquidity (continued):
Net cash provided by operating activities was $32,828,000 and $36,298,000
for the three months ended March 31, 1997, and 1996, respectively.
The decrease of net cash provided of $3,470,000 was due primarily to
an increase in land development expenditures offset partially by the
factors discussed previously under the operating results of the four
major business segments.
Net cash used in investing activities was $58,340,000 and $28,965,000 for
the three months ended March 31, 1997 and 1996, respectively. The
increase in net cash used of $29,375,000 was due primarily to
increases in expenditures for properties under development.
Net cash provided by financing activities was $100,724,000 and net cash
used in financing activities was $67,476,000 for the three months
ended March 31, 1997 and 1996, respectively. Cash flows from
financing activities for 1997 included the proceeds from the public
offering of Series B Convertible Preferred stock. There was no
similar transaction in the 1996 period.
Information relating to forward-looking statements:
This report on Form 10-Q of the Company includes forward-looking statements
which reflect the Company's current views with respect to future
events and financial performance. These forward-looking statements
are subject to certain risks and uncertainties, including those
identified below, which could cause actual results to differ
materially from historical results or those anticipated. The words
"believe," "expect," "anticipate" and similar expressions identify
forward-looking statements. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of
their dates. The Company undertakes no obligation to publicly update
or revise any forward-looking statements, whether as a result of new
information, future events, or otherwise. The following factors could
cause actual results to differ materially from historical results or
those anticipated: (1) real estate investment risks; (2) development
risks; (3) illiquidity of real estate investments; (4) dependence on
rental income from real property; (5) effect of uninsured loss; (6)
lack of geographical diversification; (7) possible environmental
liabilities; (8) difficulties of compliance with the Americans with
Disabilities Act; (9) competition; (10) changes in the economic
climate and (11) certain matters relating to Nevada properties. For a
more detailed discussion of these factors, see Exhibit 99.2 of the
Company's Form 10-K for the fiscal year ended December 31, 1996.
12
Part II. Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities.
None
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Reference is made to the Exhibit Index.
(b) Reports on Form 8-K
None
13
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE ROUSE COMPANY
Principal Financial Officer:
Date: May 14, 1997 By /s/Jeffrey H. Donahue
Jeffrey H. Donahue
Senior Vice President and
Chief Financial Officer
Principal Accounting Officer:
Date: May 14, 1997 By /s/George L. Yungmann
George L. Yungmann
Senior Vice President and
Controller
14
Exhibit Index
Exhibit Number Description
11 Statement re Computation of per
share earnings (loss)
27 Financial Data Schedule
15
Exhibit 11
THE ROUSE COMPANY AND SUBSIDIARIES
Computation of Fully Diluted Earnings (Loss) Per Share
(Unaudited, in thousands except per share amounts)
Three months
ended March 31,
1997 1996
Earnings before extraordinary losses $ 8,410 $ 6,743
Add after-tax interest expense applicable
to convertible subordinated debentures 1,215 1,215
Earnings before extraordinary losses,
as adjusted 9,625 7,958
Extraordinary losses (2,129) (1,315)
Net earnings, as adjusted $ 7,496 $ 6,643
Shares:
Weighted average number of common shares
outstanding 66,422 48,058
Assuming conversion of convertible Preferred stock 2,064 10,600
Assuming conversion of convertible subordinated
debentures 4,542 4,542
Assuming exercise of options and warrants reduced
by the number of shares which could have been
purchased with the proceeds from the exercise
of such options 1,090 412
Weighted average number of shares outstanding,
as adjusted 74,118 63,612
Earnings per common share assuming full dilution:
Earnings before extraordinary losses, as adjusted $ .13 $ .12
Extraordinary losses (.03) (.02)
Net earnings, adjusted $ .10 $ .10
This calculation is submitted in accordance with Regulation S-K item 601 (b)
(11) although it is contrary to paragraph 40 of APB Opinion No. 15 because
it produces an anti-dilutive result.
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This financial data schedule is included to comply with the requirements of
Item 601 (c) (2) of Regulations S-K and S-B. This schedule contains summary
financial information extracted from Form 10-Q for the quarterly period ended
March 31, 1997 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> $118,978
<SECURITIES> $ 3,895
<RECEIVABLES> $ 104,396
<ALLOWANCES> $ (22,278)
<INVENTORY> 0
<CURRENT-ASSETS> $ 206,335<F1>
<PP&E> $ 3,943,616
<DEPRECIATION> $ (571,153)
<TOTAL-ASSETS> $ 3,756,406
<CURRENT-LIABILITIES> $ 357,202<F2>
<BONDS> $ 2,771,250
<COMMON> $ 668
0
$ 41
<OTHER-SE> $ 364,341
<TOTAL-LIABILITY-AND-EQUITY> $ 3,756,406
<SALES> $ 211,041
<TOTAL-REVENUES> $ 211,041
<CGS> 0
<TOTAL-COSTS> $ 139,534
<OTHER-EXPENSES> $ 0
<LOSS-PROVISION> $ 897
<INTEREST-EXPENSE> $ 54,322
<INCOME-PRETAX> $16,288
<INCOME-TAX> $ 7,878
<INCOME-CONTINUING> $ 8,410
<DISCONTINUED> 0
<EXTRAORDINARY> $ (2,129)
<CHANGES> 0
<NET-INCOME> $ 6,281
<EPS-PRIMARY> $ .08
<EPS-DILUTED> $ .10
<FN>
<F1>Current assets include cash, unrestricted marketable securities, current
portion of accounts and notes receivable and prepaid expenses and deposits.
<F2>Current liabilities include the current portion of long-term debt and
accounts payable, accrued expenses and other liabilities.
</FN>
</TABLE>
